A.   INTRODUCTION

Mohamed Zahid Yon bin Mohamed Fuad & Anor v Fat Boys Records Sdn Bhd and other appeals [2022] 5 MLJ 764 involves 6 inter-related appeals heard together before the Court of Appeal. The appeals dealt with the effect of non-disclosure of material facts and delay on the application for an Anton Piller Order (“APO”) which is essentially a ‘search and seizure’ order.

APPEALS	372 and 409	370 and 371	408 and 410
APPELLANT	1.     Mohamed Zahid Yon bin Mohamed Fuad (“Zahid”) 2.     Fat Boys Sdn Bhd (“FBSB”)	1.     Zahid 2.     FBSB	1.     FB Group Sdn Bhd (“FBGSB”) 2.     Muniruddeen Bin KMS Abdul Azis (“Munir”)
RESPONDENT	Fat Boys Records Sdn Bhd (“Respondent”)
SUBJECT MATTER	Appeal against the High Court Judge’s (“HCJ”) decision in refusing stay.	Appeal against HCJ’s decision in dismissing the Appellants’ applications to set aside an ex parte APO and granting the Respondent’s application for an inter parte APO.
STATUS/ DECISION	Withdrawn on hearing day. Struck out with no order as to costs.	All appeals allowed and the HCJ’s decisions were set aside.

Zahid Yon – Brief Timeline

Click on the link above for the brief timeline.

Arising from the civil suit filed by the Respondent on 28 Sep 2020 (the “4^th Suit”), an ex parte APO was granted. The APO essentially allows Zahid’s residential address, FBSB’s business address and FBGSB’s business address to be searched. The items to be seized and searched included Respondent’s assets (equipment and documents), FBSB and FBGSB list of clients, human resources documents, project listings and secretarial documents, and Zahid’s emails.

B.    REQUIREMENTS FOR AN APO

APO Requirements

Click on link above for APO requirements.

In relation to the full and frank disclosure, the duty of the applicant is laid out in Order 29, rule 1(2A) of the Rules of Court 2012 (“ROC”), where the affidavit in in support of an application made ex parte must contain a clear and concise statement of:

• the facts giving rise to the claim;
• the facts giving rise to the application for interim injunction;
• the facts relied on to justify the application ex parte, including details of any notice given to the other party or, if notice has not been given, the reason for not giving notice;
• any answer by the other party (or which he is likely to assert) to the claim or application;
• any facts which may lead the Court not to grant the application ex parte or at all;
• any similar application made to another Judge, and the order made on that application; and
• the precise relief sought.

C.   ISSUES

• Whether there is full and frank disclosure of material facts by the Respondent.

Answer: No.

Reason: –

CBT Charges

• The Respondent failed to disclose the criminal breach of trust (“CBT”) charges against Jason and Yakub which was a relevant material fact as Jason had accused Zahid of being the person who orchestrated the CBT charges.
• The CBT charges relate whether the APO sought was a genuine remedy or an act of malicious revenge and retaliation against Zahid and the other Appellants.
• The Court further held that it is not for the Respondent to make the determination of whether what are relevant material facts but it is for the court to decide.

Oppressive Conduct

• The Respondent failed to disclose the oppressive conduct where Zahid’s interest as a shareholder of the Respondent had been disregarded in respect of the change of signatory of the Respondent’s CIMB bank account (“CIMB Account”).
• Jason was appointed as the sole bank signatory of the CIMB Account without Zahid’s knowledge and authorisation which led to him lodging a police report.
• The Court found that it was a relevant material fact as it relates to the allegation that Zahid is the sole person to be blamed over the freezing of the CIMB Account, which relates to the Respondent’s claim that Zahid had breached its director’s duties.
• If such conduct was disclosed, the Court could have inferred that Jason was to be blamed. The Court then found out that the Respondent had, under the management of Jason and Yakub withdrew all the funds in the CIMB Account.

 

• Whether the delay in filing an application for an APO affects the same. 

Answer: Yes.

Reason: –

• The delay in filing the 4^th suit and the application for inter parte APO shows:
• the lack of urgency; and
• there was no real possibility the appellants may destroy the evidence in their possession
• The Respondent tried to explain away the delay on the basis that there were attempts for an amicable settlement. However, the Court held that when there is settlement negotiations, it shows that there was no fear of evidence destruction. Failure to settle is unlikely to change the risk of destruction of evidence.

D.   Key Takeaway

APO is crucial for a plaintiff of a civil suit in its attempt to preserve the evidence of their claim. Given the nature of APO, the Courts have repeatedly stressed that an APO is a draconian order and even likened it to a ‘nuclear’ weapon in law. Therefore, the Courts call for strict compliance with the key requirements of an APO and O. 29, r. 1(2A) of the ROC.

For future applicants of an APO, make sure that you comply with the requirements, especially to disclose all relevant material facts even if they are not favourable to your application, and do not delay your inter parte application after securing the ex parte application.

 

Food for thought: Even if an ex parte APO was ultimately set aside, but if the true intention is for revenge and retaliation, perhaps it has already been achieved.

Written by: Rachel Chong ([email protected]).  Rachel Chong assists Rachel Lim ([email protected]) for Intellectual Property disputes handled by the firm.